Glencore, the FTSE 100 trading giant, has agreed to take over Canada’s biggest
grain handler, marking the start of a major push into North America.

The Swiss-based commodities company will pay C$16.25 a share for Viterra in a deal which values the Canadian company at around C$6.1bn (£3.9bn).

Chris Mahoney, Glencore’s agricultural head, said that Glencore was attracted by Viterra’s assets and has its eye on pushing into the US, through further acquisitions, using Regina in Canada as its North American headquarters.

“I think it’s no secret that prior to this deal that Glencore had very little in North America, in contrast to the assets and the structures and the people we have in the rest of the world,” he said. “So because of this it would always have been very difficult for us to grow organically, silo by silo, in Canada... I think the same is still true for the US.”

Viterra, a market leader in Australia and Canada, has around 6000 employees in 14 countries. Its board has approved the deal, as has its biggest shareholder, but Glencore still needs regulatory approvals. Glencore would have to pay a “reverse” break fee of C$50m to Viterra should the transaction not close for regulatory reasons.

However, Mr Mahoney saw no regulatory obstacles after – as expected – Glencore agreed the deal in partnership with two Canadian companies, Agrium and Richardson. They will buy the majority of Viterra’s Canadian assets for about C$2.6bn in cash, leaving Glencore with the bulk of the Canadian storage, handling and port facilities and Viterra’s entire Australian operations.

That means the deal will strengthen two existing Canadian companies, Mr Mahoney argued, when asked how Glencore will demonstrate it offers a “net benefit” to Canada, as required by its authorities.

Management at Glencore is currently wooing FTSE 100 miner Xstrata's shareholders over a proposed £50bn-plus “merger of equals”. Mr Mahoney said that the Viterra deal would not impact these plans and that Xstrata's chief executive Mick Davis had been aware of the talks for months.